DVD Gift Sets a Popular Niche Market

New Line Home Entertainment's The Lord of the Rings: The Fellowship of the Ring gift set -- with its bookends, a National Geographic making-of DVD and the celebrated extended version of the film -- made up nearly 25 percent of total sales of the Nov. 12 Fellowship release, according to VideoScan sales data.

Columbia TriStar Home Entertainment's Spider-Man Limited Edition Gift Set -- which included the two-disc special edition DVD plus Stan Lee's Mutants, Monsters and Marvels DVD, collectible stenotypes, a limited edition lithograph and a reprint of the comic book edition that introduced Spider-Man -- and Universal Studios Home Video's E.T.: The Extra-Terrestrial Ultimate Collector's Gift Set, featuring two versions of the film, a collector's book that includes the movie script and the remastered CD soundtrack, each made up about 2 percent of total sales on the fourth-quarter titles, according to VideoScan data.

While the numbers aren't always enormous, gift sets are an important niche market, especially in the fourth quarter, suppliers said.

An elaborate gift set won't work for just any title. E.T., with its nostalgic appeal; Fellowship, with its legion of J.R.R. Tolkien fanatics; and Spider-Man, with a firm grip on the discretionary dollars of comic book lovers, all lent themselves to special treatment for avid collectors and film fans, industry observers said.

Much of the Fellowship gift set's success can be attributed to the phenomenal quality of its four-disc extended edition, which was available for individual purchase, said Bill Hunt, editor of DVD site TheDigitalBits.com.

“That's the one we all ran out to get,” he said. “It's probably the best DVD that's ever been done to date. The bookends and the National Geographic DVD kind of just adds one more wrinkle for the really die-hard Tolkien fans.”

Providing valuable additional material is key, Hunt said, as is providing choice for the consumer.

“The serious sort of movie fan doesn't want to get milked,” he said.

The Fellowship and Spider-Man sets were truly limited editions.

“We had such a long lead time for creating the bookends, we basically had one go at it,” said Justine Brody, VP of marketing and promotions for New Line. “We are virtually sold through.”

Suzanne White, VP of marketing for Columbia TriStar, said creating the Spider-Man set was a painstaking process and the supplier had to beef up printing orders for some of the included elements because there was such a big response from retailers in the solicitation cycle.

“It's hard on the operations end to get all those unique items out. We couldn't do it again,” she said. “It's one of those things where you go to press once.”

John Kim, assistant manager for DVD-only superstore DVD Planet, said the store sold “hundreds and hundreds” of copies of all three gift sets, a lot of them to international buyers via the company's Web catalog at DVDplanet.com. But, he added, most average shoppers are looking for the cheapest price.

In store, the challenge is merchandising these types of titles in the right place at the right time, Kim said. “When it first comes out, you have a corner set up with a big display, then later you keep only a few out on the shelves,” he said. “Summer or the holiday season are the big times for these big-ticket items.”

Making sure the sets would play at retail was a big concern for all three suppliers.

“We were concerned about the size, and we addressed that way up front,” Brody said. “We actually had mockups that we were showing retailers who were most resistant.”

When designing the packaging for Spider-Man, Columbia TriStar tried to envision where the DVD would fall on shelves after the peak holiday season and kept the width to the space of two DVD cases.

“We did a major undertaking, having our reps talk to their accounts,” White said. “We didn't want to be limited when it came to permanent shelving.”

Universal found another pitfall when it initially designed a set for E.T.: The Extra-Terrestrial.

Universal EVP of marketing Ken Graffeo said the studio first intended to release the original 1982 theatrical version only in the collector's set, but Steven Spielberg wanted to make both theatrical versions available to all.

“It was a gift he wanted to give E.T. fans,” Graffeo said. “He didn't want it to just be in the gift set.”

To gauge consumer interest, Universal does advance research, Graffeo said. “A lot of it comes down to what does the fan really want,” he said.